Employment Hero’s latest SME Index, which draws from an expansive dataset of over 1.5 million employees and 150,000 SMEs, reveals major discrepancies in wages across different sectors.
Overall, hourly rates grew by +0.7 per cent, up to $40.35, and quarterly growth of +0.9 per cent, indicating consistent upward momentum for this sector, after a concerning slump in recent months. The average hourly rate across Australia now sits at $38.67 month-on-month, a drop of -1.4 per cent in April. However, year-on-year, the average rate has grown annually by +8 per cent, which while potentially good for employees in the short-term, is seen as unsustainable and a cost burden on SME employers.
In particular, the retail and hospitality sector recorded the lowest hourly rate at $33.10; a monthly decrease of -1.3 per cent since April. This is aligned with a downward trajector that the Index has recorded since the start of 2024 and has already raised repeated concern for both workers and business owners in this space.
At the top of the chain, the technology sector is enjoying the highest hourly rate at $55.79. However, a -3.3 per cent dip in monthly wages and an annual drop of -2.5 per cent suggests a continued cooling within this industry, and challenges in maintaining competitive pay as austerity continues in the sector’s push for growth.
Meanwhile, the healthcare sector recorded a robust annual wage growth of +7.5 per cent despite a -2.2 per cent monthly drop in wages, reflecting the ongoing demand for healthcare professionals. The construction and trade sector meanwhile has shown steady wage growth over the past year, with significant annual growth of +6.2 per cent.
“The disparity in wage growth across industries paints a complex picture of the Australian economy right now,” Ben Thompson, Co-Founder and CEO of Employment Hero, said. “If ongoing wage growth continues unchecked, it may contribute to further inflation, posing risks to economic stability.”
The median hours worked have remained relatively stable across most sectors, with an average of 141.9 hours per month. Construction and trade employees worked the most hours, equating to 167.7 in May. This represented a -0.4 per cent drop Month-on-Month; the lowest drop of all other industries. The retail and hospitality sector meanwhile took a huge drop, with median hours dropping by -2.5 per cent; the biggest dip of all industries.
“The stability in median hours worked across most sectors is encouraging, particularly in construction and trade services, which saw the least decline,” Eddie Kowalski, Senior Insights Manager at Employment Hero, said. “This resilience can perhaps be attributed to the ongoing demand for workers on large-scale infrastructure projects across the country. Meanwhile, the healthcare sector continues to show high numbers of hours worked despite a slight drop, reflecting its critical role and growth trajectory which can somewhat be attributed to a rising population.
“However, the significant decrease in hours in the retail and hospitality sector highlights ongoing challenges and the need for strategic adaptation to shifting consumer behaviours, but even more so, it represents yet another concrete sign of struggle that signals a greater need for government support for small businesses,” Kowalski added.
Thompson pointed out that the retail and hospitality sector is particularly vulnerable in the current economic climate.
“Business owners are strapped for cash and the declining wages and reduced hours are symptomatic of broader financial pressures these businesses are facing,” he said. “This trend not only impacts employees but also overall consumer spending and economic stability. Addressing these challenges is crucial for the health of the broader economy, and businesses need to now explore sustainable strategies to navigate these challenges and support their workforce as a direct result.”
